Masters of identity theft

Duo pleaded guilty last year in one of biggest cases in Md. history

October 02, 2005|By LAURA SMITHERMAN | LAURA SMITHERMAN,SUN REPORTER

From their middle-class, Glenn Dale home in Prince George's County, Michele and Francis Fletcher had all the high-tech gadgetry they needed to crack and copy a magnetic stripe, the band on the back of credit cards.

Armed with phony driver's licenses and counterfeit credit cards they made themselves, the couple hit stores around the region. Among their purchases: multiple $500 gift cards from a Target store in Waldorf, a John Deere riding lawn mower from Home Depot in Bowie, and two flat-screen televisions from a Circuit City in Potomac Mills, Va. The scheme, which began several years ago, grew into one of the largest cases of identity theft in Maryland history.

The case offers a prime example of how criminals prey on the so-called "magstripe," which stores a cardholder's personal information, and how they use readily available computer equipment to clone credit cards.

Identity theft has become one of the fastest-growing crimes in the nation, and the pilfering of existing credit card accounts cost businesses and consumers nearly $20 billion last year, according to Javelin Strategy & Research, a California consulting firm.

"Ten years ago, you would get your purse stolen, and the bad guys would use your credit card once and throw it away," said Montgomery County Police Detective Scott G. Wyne, who investigated the Fletchers. "Now the technology is cheap, and you can make IDs and cards at home."

The Fletchers' spending spree neared an end in 2003, but almost by accident. When one transaction took longer than normal because a card couldn't be swiped, a clerk had to manually enter the numbers. That caused security cameras to automatically train on them and drew the attention of authorities.

Police soon raided the Fletchers' home. They discovered a skimming device that had been used to steal account data from customers who charged purchases at a Discovery Channel store in the Pentagon City mall.

A briefcase held a transaction report of names and credit card numbers from a Hecht's department store in the District of Columbia. Authorities suspect the couple got more numbers from skimmers planted inside gas station pumps in Florida.

Photos of their residence taken during the raid reveal the modern cache of the identity thief: computers and scanners. Police found a card-embossing machine and a printer that could encode a magstripe. Hundreds of plastic cards were scattered near the equipment along with material to laminate and add a silver color to the raised numbers and letters on a card.

"They were blown away by what they found," said Bryan Foreman, a federal prosecutor on the case. "It was a virtual credit-card-making plant."

Michele Fletcher, a beauty shop owner, bought credit-card-making apparatus from legitimate companies. She told sales personnel that she planned to make cards for a customer rewards program at her own business, Foreman said.

One machine was made by Fargo Electronics, whose products are used by the Baltimore Orioles, the U.S. Naval Academy and the University of Maryland to produce identification badges, according to the company.

Alan Fontanella, a product director at Fargo, said the company doesn't make machines that could emboss cards and that the Fletchers might have used its equipment to make false IDs. The company sells only through authorized dealers and limits distribution of printers that add security features such as holograms, he said.

"We just don't sell those to anyone," Fontanella said.

As for low-end printers that encode magnetic stripes, he said, "Let's just say that there's nothing that would stop almost anyone from magnetically encoding a card."

The state of Maryland learned just how sophisticated counterfeiters have become when the Motor Vehicle Administration unveiled a new driver's license two years ago, around the time that police were closing in on the Fletchers. The state spent $40 million and took three years to revamp the licenses with multicolor holograms, including a picture of a blue crab. But within weeks, local law enforcement officials were recovering passable fakes that appeared on the streets.

The Fletchers pleaded guilty last year to the fraud, which bilked as much as $1 million. They are currently serving sentences of four to five years in separate federal prisons in Pennsylvania and Connecticut.

Before they signed the plea agreement, though, they made one last purchase while out on bail. At a ticket counter at Baltimore-Washington International Airport, they handed over a counterfeit card and bought boarding passes for themselves and their four children.